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why fixtures, fittings, gas and electric are not among the full cost of a box of...

why fixtures, fittings, gas and electric are not among the full cost of a box of chocolate

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Answer #1

AS THERE ARE EXPENSES WHICH ARE NOT FULLY RELATED TO A PARTICULAR PRODUCT MANUFACTURED BY THE COMPANY.

FITURES AND FITTINGS ARE THE CAPITALISED COSTS AND WILL GIVE BENEFIT FOR MORE THAN A PERIOD THAT IS WHY THEY ARE NOT FULLY ADDED TO COST OF A BOX OF CHOCOLATE.

WHEREAS GAS AND ELECTRIC ARE INDIRECT COST USED TO MANUFACTURE CHOCOLATES AND ARE ALLOCATED BASED ON PRODUCTION UNITS OF EACH BOX OF CHOCOLATE THAT IS WHY THEY ARE NOT ALLOCATED FULLY TO A SINGLE BOX OF CHOCOLATE.

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